Compensation for default of acceptance following invalid termination
LAG decision diverges from BAG precedent
The Regional Labor Court (LAG) of Baden-Württemberg, in its ruling of September 11th, 2024 (case reference.: 4 Sa 10/24), determined that the offsetting of wages willfully not earned pursuant to § 11 No. 2 KSchG only applies if the employee* was aware of or made aware of alternative employment opportunities. This ruling diverges from the decision of the Federal Labor Court (BAG) dated February 7, 2024 (case reference.: 5 AZR 177/23). Consequently, the appeal for the defendant was permitted and is currently pending under case reference: 5 AZR 273/24.
*where only the masculine form is mentioned in this article, the feminine / diverse form is also included
LAG (Regional Labour Court), verdict of 11th September 2024 - 4 Sa 10/24
Facts of the case
The defendant employer terminated the employment relationship with the plaintiff extraordinarily with notice effective June 30, 2021. The plaintiff's wrongful dismissal claim was upheld through the appellate stage.
The parties continue to dispute claims for default of acceptance compensation for the period from July 2021 to August 2022, during which the plaintiff received unemployment benefits. Throughout his unemployment, the plaintiff did not receive any job placement offers from the employment agency. He had informed the agency of his intention to return to his job with the defendant and did not make independent efforts to find other employment, arguing that such efforts were unnecessary as he expected to resume work with the defendant following the labor court’s decision.
The defendant argued that the plaintiff acted willfully by failing to seek alternative employment. Given the low unemployment rate and the abundance of available positions in the production and manufacturing sector, it was likely that the plaintiff could have secured employment had he made reasonable efforts.
The labor court ruled in favor of the plaintiff, ordering the defendant to pay compensation for default of acceptance. The appellate court also upheld the plaintiff’s claim. The appeal is currently pending under case reference: 5 AZR 273/24.
Reasons for the decision
The LAG found that the plaintiff is entitled to compensation for default of acceptance under §§ 611a para. 2, 615 sentence 1 BGB. The offsetting of potential earnings under § 11 No. 2 KSchG was not applicable as no causal link between the willful failure to seek work and the absence of alternative earnings could be established. Such causality can only be assumed if the employee was aware or made aware of alternative job opportunities. The defendant only informed the plaintiff of specific job openings after the default period had ended and could not prove that the plaintiff had knowledge of any available positions. General references by the defendant to a strong job market and low unemployment rates were insufficient.
Conclusion & practical tip
For employers, this ruling implies that following an invalid termination, they should either offer interim employment or inform the employee of specific job openings at the beginning of the default period, not after it has concluded.
The decision of the BAG remains to be seen.
You might also be interested in these blog article on the topic of default wage claims: Obligation to job search during the notice period?
Author of this article: Janina Aue, Lawyer & Mediator
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